2005 (10) TMI 327 - AT - Central Excise

Summary

Issues:
1. Appeal against Commissioner (Appeals)'s order granting refund on duty paid on physician's samples of P & P Medicines.
2. Application of unjust enrichment provisions.
3. Interpretation of duty payment under protest.
4. Burden of proof regarding passing on of duty to others.

Analysis:
1. The case involves an appeal by the Revenue against the Commissioner (Appeals)'s order accepting the assessee's appeal for a refund on duty paid on physician's samples of P & P Medicines. The duty was paid under protest as per Rule 233B of C.E. Rules. The Commissioner (Appeals) found that since the physician's samples were distributed free of cost, the burden of duty had not been passed to any other person. The Revenue contended that unjust enrichment provisions apply, and the mere sale of the physician's free samples does not negate the passing on of duty. However, the Tribunal upheld the Commissioner (Appeals)'s decision, stating that the duty was not passed on as the appellants did not collect duty from the physicians who received the free samples.

2. The Tribunal referenced the Apex Court judgment in the case of Sinkhai Synthetics and Chemicals P. Ltd. v. CC, Aurangabad, which held that when duty is paid under protest, the refund is not barred by unjust enrichment. In this case, the appellants bore the duty incidence by providing free samples to physicians without collecting duty from them. Therefore, the Tribunal found no basis to conclude that the duty had been passed on to customers. The decision of the Commissioner (Appeals) was deemed legally correct, and the appeal by the Revenue was dismissed.

3. The Tribunal's analysis emphasized the importance of the duty being paid under protest, as it impacts the application of unjust enrichment provisions. By following the legal precedent set by the Apex Court, the Tribunal clarified that in cases where duty is paid under protest and not passed on to others, the refund cannot be denied based on unjust enrichment principles.

4. The Revenue's failure to produce documents proving that excess duty paid had been passed on to others weakened their argument. The burden of proof regarding the passing on of duty to others lies with the party making the claim, and in this case, the Tribunal found that the appellants had not passed on the duty to customers, thereby upholding the Commissioner (Appeals)'s decision.

This detailed analysis of the judgment highlights the key legal principles applied by the Tribunal in resolving the issues raised in the appeal concerning duty payment, unjust enrichment, and burden of proof.